Singapore Company Guide Genting Singapore
Version 13 | Bloomberg: GENS SP | Reuters: GENS.SI Refer to important disclosures at the end of this report
DBS Group Research . Equity 11 May 2018 BUY Don’t miss the chance Last Traded Price ( 10 May 2018): S$1.16 (STI : 3,537.59) Price Target 12-mth: S$1.49 (28% upside) Recent correction an opportunity. We maintain our BUY call on Genting Singapore (GENS) with a TP of S$1.49. GENS’ share Analyst price corrected by over 10% the past 3 months due to concerns Mervin SONG, CFA +65 6682 3715 [email protected] post the 4Q17 results that adjusted EBITDA margins would be What’s New under pressure. We believe these concerns were overplayed given the dip in margins was largely due to payment of staff 1Q18 adjusted EBITDA up 27% y-o-y to S$359m bonuses, and margins in 1Q18 have since rebounded to c.54%, slightly ahead of expectations the highest level in over 11 quarters from 44% in 4Q17. Thus, Strong growth in VIP rolling chip volumes (c.34% y-o-y) at current share price, GENS offers outstanding value for with VIP win rate hitting the “lucky” level at 3.2% exposure to a growing VIP business and a duopoly market. Hold adjusted EBITDA still up a healthy 17% y-o-y Where we differ – Deserves to trade at average EV/EBITDA Upside risk to our estimates if strong volume growth is multiple. Consensus’s TP implies an EV/EVITDA multiple that is sustained below GENS’ average multiple of c.12x. We believe GENS deserves to trade at its average EV/EBITDA multiple given a sustained earnings recovery outlook. Furthermore, the reasons Price Relative why GENS traded below its average multiple, namely elevated S$ Relative Index 1.5 215 bad debts and falling earnings, are no longer present. 1.4 195 1.3 175 1.2 155 1.1 135 1.0 Re-rating catalyst. Despite the recent turnaround in profitability, 0.9 115 0.8 95 some investors remain sceptical over the sustainability of GENS’ 0.7 75 0.6 55 May-14 May-15 May-16 May-17 May-18 earnings recovery. We believe as we progress throughout 2018,
Genting Singapore (LHS) Relative STI (RHS) as GENS selectively extends credit to its VIP customers which should translate to higher y-o-y increase in earnings, this Forecasts and Valuation scepticism should subside, resulting in a further re-rating of FY Dec (S$m) 2017A 2018F 2019F 2020F GENS’ share price. Revenue 2,393 2,452 2,566 2,662 EBITDA 1,151 1,229 1,273 1,341 Pre-tax Profit 860 965 1,016 1,090 Valuation: Net Profit 601 762 803 861 We maintain our DCF-based TP to S$1.49. With over 25% Net Pft (Pre Ex.) 618 762 803 861 potential capital upside, we reiterate our BUY call. Net Pft Gth (Pre-ex) (%) 141.8 23.3 5.3 7.3 EPS (S cts) 4.99 6.33 6.66 7.15 EPS Pre Ex. (S cts) 5.13 6.33 6.66 7.15 Key Risks to Our View: EPS Gth Pre Ex (%) 142 23 5 7 Decline in VIP and mass businesses. The key risk to our positive Diluted EPS (S cts) 4.99 6.33 6.67 7.15 view is a slower-than-expected recovery or decline in GENS’ VIP Net DPS (S cts) 3.50 4.00 4.50 4.50 and mass divisions. BV Per Share (S cts) 61.8 65.4 68.9 72.9 PE (X) 23.3 18.3 17.4 16.2 PE Pre Ex. (X) 22.6 18.3 17.4 16.2 At A Glance P/Cash Flow (X) 11.1 12.3 11.2 10.7 Issued Capital (m shrs) 12,045 EV/EBITDA (X) 9.9 8.9 8.2 7.3 Mkt. Cap (S$m/US$m) 13,972 / 10,444 Net Div Yield (%) 3.0 3.4 3.9 3.9 Major Shareholders (%) P/Book Value (X) 1.9 1.8 1.7 1.6 Genting Bhd 52.8 Net Debt/Equity (X) CASH CASH CASH CASH RWL 8.0 ROAE (%) 8.2 10.0 9.9 10.1 GHL 6.0 Earnings Rev (%): 0 0 0 Free Float (%) 47.2 Consensus EPS (S cts): 6.10 6.40 6.70 Other Broker Recs: B: 15 S: 0 H: 6 3m Avg. Daily Val (US$m) 32.8 ICB Industry : Consumer Services / Travel & Leisure Source of all data on this page: Company, DBS Bank, Bloomberg Finance L.P
ed: JS / sa:SM, PY, CS Company Guide Genting Singapore
WHAT’S NEW Strong start to the year
1Q18 results slightly above expectations Remains in a net cash position The upturn in earnings since 3Q16 continued into GENS remains in a strong financial position with net 1Q18 with adjusted EBITDA and normalised profit cash of c.S$3.0bn (c.S$4.1bn of cash and restricted (excluding exceptional items) up 27% and 64% y-o- cash less gross debt of S$1.1bn), up marginally from y to S$358m and S$239m respectively which was S$2.7bn at end 4Q17. slightly above expectations. While 1Q usually benefits from the seasonal boost from the Chinese Development opportunities New Year period, 1Q18 adjusted EBITDA GENS guided it continues to be in active discussions represented c.29% of our FY18 forecast. with the Singapore authorities about the potential The increase in profitability was attributed to c.34% redevelopment of its Resorts World Sentosa (RWS) y-o-y increase in VIP rolling chip in SGD terms or property. However, it was unable to provide any c.45% y-o-y to US$7.1bn. This is faster than the updates at this point in time. 10% y-o-y growth we have pencilled in USD terms. On Japan, the Integrated Resort (IR) implementation We also understand GENS’ market share in VIP bill has been endorsed and provides a regulatory rolling chip volumes now stands at c.49%, an framework for Integrated Resorts in Japan. These improvement from the high 30% to low 40% level include proposed 30% tax rate on gross gaming over the past couple of years. The 1Q18 results were revenue and JPY6,000 entry levy for locals. We also boosted higher than average VIP win of 3.2% understand GENS is in active dialog with potential (2.95% in 1Q17). On a hold adjusted basis partners, local cities and suppliers for a potential bid assuming 2.85% theoretical win rate, adjusted after the bill has been passed which the market is EBITDA would have come in at c.S$326m which speculating will be sometime this year. would have still risen a healthy 17% y-o-y. The mass business (non-rolling and slots) also GENS on the front foot showed an improvement with gross gaming revenue For the remainder of 2018, we understand that GENS increasing by c.7% y-o-y in SGD terms. will seek to grow its VIP and premium mass business Owing to the fixed cost leverage, adjusted EBITDA and will selectively expand credit. Year to date, the margins came in c.53% compared to 48% achieved improvement in business has been broad based and a in 1Q17 and whole of FY17. key growth has been the addition of new customers. Although bad debts ticked up to S$9.1m from We expect this trend to continue. Furthermore, we S$4.7m in 4Q17, it remains low and contained believe there remains upside to our earnings forecasts down from S$15.0m in 1Q17 and S$50-90m level should the strong y-o-y in VIP rolling chip volumes is during FY15-16. sustained over the course of the year.
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Company Guide Genting Singapore
Quarterly / Interim Income Statement (S$m) FY Dec 1Q2017 4Q2017 1Q2018 % chg yoy % chg qoq
Revenue 587 580 675 15.1 16.4 Cost of Goods Sold (326) (345) (332) 1.9 (3.9) Gross Profit 261 235 343 31.6 46.2 Other Oper. (Exp)/Inc (47.9) (54.0) (54.1) 12.9 0.1 Operating Profit 213 181 289 35.8 60.0 Other Non Opg (Exp)/Inc (6.0) (14.9) (1.2) 80.4 (92.1) Associates & JV Inc 0.93 0.65 0.70 (24.8) 8.0 Net Interest (Exp)/Inc 10.3 5.14 6.69 (34.7) 30.1 Exceptional Gain/(Loss) 35.1 (0.9) (22.0) nm nm Pre-tax Profit 253 171 274 8.0 60.1 Tax (43.1) (36.8) (56.3) 30.6 52.9 Minority Interest (29.1) (1.2) 0.0 nm nm Net Profit 181 133 217 19.9 63.6 Net profit bef Except. 146 134 239 63.8 78.9 EBITDA 283 255 359 26.7 40.7 Margins (%) Gross Margins 44.5 40.5 50.9 Opg Profit Margins 36.3 31.2 42.8 Net Profit Margins 30.9 22.9 32.2
Source of all data: Company, DBS Bank
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Company Guide Genting Singapore
Recovery in Macau’s gross gaming revenue CRITICAL DATA POINTS TO WATCH y-o-y growth 50% 40% Critical Factors 30% 20% Recovery in VIP business. Over the past couple of years, with the 10% Chinese government embarking on an anti-corruption and 0% -10% austerity drive, VIP players have generally shunned casinos -20% -30% across Asia to avoid the scrutiny of government officials. This -40% resulted in VIP gross gaming revenue (GGR) in Macau and -50% -60% Singapore falling 40% and 34% in CY15 and 7% and 27% in CY16 respectively. For GENS, in combination with its greater focus on credit quality, its market share has declined from mid- VIP win rate above the normalised range 50’s in 2014 to mid-30% by end 2016. Nevertheless, with 3.5% Macau’s GGR on an upward trend since August 2016, we are potentially at the start of a recovery. Assuming Singapore 3.0% follows the trends in Macau with a lag and with management now focused on growing its top line, these bode well for 2.5% GENS's business. With VIP rolling chip volumes bottoming out in 2017 (-1% y-o-y) following a c.35% falling 2016, we expect a 2.0% 10% jump in 2018 before a 3% increase in 2019.
1.5% Bad debts to remain low. GENS’s de-rating in 2015 and early 1Q123Q121Q133Q131Q143Q141Q153Q151Q163Q161Q173Q171Q18 2016 was partially due to concerns over rising bad debts. VIP win rate Lower bound - 2.7% Upper bound - 3.0% However, in FY17, pressure on earnings from bad debts eased given GENS's more conservative extension of credit to its VIP Bads debts now under control customers. This can be seen in bad debts falling to S$14-15m 100 25% 90 Bad debts remain low per quarter during 1Q17-3Q17 and falling further to c.S$4m in 80 20% 4Q17 from around S$92m in1Q16. Going forward, we estimate 70 GENS’s impairments on receivables to remain low at c.S$14m 60 15% 50 per quarter. 40 10% 30 Volatility in regional currencies. China, Malaysia and Indonesia 20 5% 10 are key markets for GENS, and in late 2016 and early 2017, 0 0% there were headwinds as the SGD strengthened against other 1Q11 4Q11 3Q12 2Q13 1Q14 4Q14 3Q15 2Q16 1Q17 4Q17 regional currencies such as CNY, MYR and IDR. However, these Impairment loss on receivables % of trade receivables headwinds may reappear if the SGD appreciates against Recent strengthening of SGD a potential near term headwind regional currencies. 20.0% 15.0% Steady contribution from the mass business. The market for 10.0% USD mass players has declined over the last couple of years, with 5.0% CNY mass drop declining from c.US$8.7bn in 2012 to US$6.3bn in 0.0% 2017. However, with a projected increase in tourist arrivals in -5.0% -10.0% IDR and management’s focus on growing the top line rather than MYR -15.0% cost management, we believe the mass business will provide a -20.0% steady contribution going forward. We project flattish gross -25.0% gaming revenues for the mass business over 2018 before a 3% Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 CNY MYR IDR USD increase in 2019. Forward EV/EBITDA chart
(x) Expansion into Japan. The Japanese recently approved the 19.5 development of integrated resorts. Should GENS successfully 17.5 +2sd: 17.7x win the bid for such a project, this will boost the long term 15.5 +1sd: 14.9x earnings of the group. 13.5 Avg: 12.0x 11.5 9.5 -1sd: 9.1x 7.5
5.5 -2sd: 6.3x
Jul-2012 Jul-2014 Jul-2011 Jul-2013 Jul-2015 Jul-2016 Jul-2017
Jan-2018 Jan-2012 Jan-2013 Jan-2014 Jan-2015 Jan-2016 Jan-2017 Jan-2011 Source: Company, DBS Bank
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Company Guide Genting Singapore
Leverage & Asset Turnover (x) Balance Sheet: 0.25 0.3 Net cash position. GENS is in a strong financial position, with 0.20 net cash of c.S$3.0bn (S$4.1bn of cash and restricted cash less 0.3 gross debt of S$1.1bn) as at 31 March 2018. With operating 0.15 cashflows of S$800m to S$1.2bn per annum, GENS should 0.2 remain in a healthy financial state. In addition, the strong 0.10 0.2 balance sheet in our view allows GENS to raise sufficient debt 0.05 should it be awarded the right to develop an integrated resort in Japan which could cost US$7-12bn. 0.00 0.1 2016A 2017A 2018F 2019F 2020F
Gross Debt to Equity (LHS) Asset Turnover (RHS) Share Price Drivers: Capital Expenditure Sustained recovery ahead. The anti-corruption and austerity S$m measures in China led to a slowdown in the Asian casino 250.0 market in both Macau and Singapore. With the Macau market 200.0 on the path of recovery (GGR rising between 1-29% since 150.0 August 2016 following 29 consecutive months of declines), GENS's successful cost containment initiatives as well as 100.0 projected fall in bad debts following stricter credit criteria for its 50.0 VIP customers, we believe GENS’s earnings are on sustained 0.0 recovery path which should translate to the share price rally 2016A 2017A 2018F 2019F 2020F continuing. Capital Expenditure (-)
ROE (%) Moving towards a more efficient capital structure. GENS has 10.0% indicated that it plans to move towards a more efficient capital structure, the first step of which was the announcement that it 8.0% plans to redeem its perpetual securities. We believe GENS will 6.0% eventually gear up its balance sheet to a modest level from a net cash position, which should result in better ROEs, triggering 4.0% a further re-rating of the stock. 2.0%
Key Risks: 0.0% 2016A 2017A 2018F 2019F 2020F Hard landing in China. A hard landing in China would present further downside risk to our earnings estimates as this will Forward PE Band (x) impact the confidence and ability of GENS’s Chinese customers (x) to gamble at its properties 55.0 +2sd: 55.5x 50.0 Credit risks. GENS extends credit to its VIP customers. In the 45.0 +1sd: 44.4x event it is unable to recover its receivables, GENS may face 40.0 35.0 Avg: 33.3x higher levels of bad debts. 30.0 25.0 -1sd: 22.2x Competition from other markets. Other markets in Asia 20.0 15.0 -2sd: 11.0x including Macau and Philippines and potentially Hainan Island 10.0
have been developing new integrated resorts which may
Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17
Jan-14 Jan-12 Jan-13 Jan-15 Jan-16 Jan-17 Jan-18 compete with GENS for the same customers. Jan-11 PB Band (x) Company Background (x) 4.5 Genting Singapore Plc (GENS) operates Resorts World 4.0 +2sd: 3.6x Singapore (RWS) which is one of the largest fully integrated 3.5 +1sd: 2.9x resorts in Southeast Asia. RWS consist of convention facilities, 3.0 2.5 Avg: 2.1x hotels, food & beverage and retail outlets, Universal Studios 2.0 Singapore and a casino. 1.5 -1sd: 1.4x 1.0 0.5 -2sd: 0.7x -
Jul-17 Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 Jul-16
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-11 Source: Company, DBS Bank
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Company Guide Genting Singapore
GENS share price versus Macau GGR y-o-y growth Remarks 50% 1.80 GENS’s share price typically 40% 1.60 tracks the direction of Macau’s GGR performance 30% 1.40 20% 1.20 Following the recovery in 10% the Macau market, GENS’s 1.00 share price also started to 0% rebound Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 0.80 -10% 0.60 -20% -30% 0.40 -40% 0.20 -50% -
Macau GGR y-o-y growth - LHS GENS share price (S$) - RHS
Source: Bloomberg Finance L.P., DICJ, DBS Bank
Gaming peer comp* Closing 12-mth Mkt PE EV/EBITDA Company FYE Curncy Price Rec Target Cap Price US$m FY18F FY19F FY18F FY19F Macau Galaxy Ent Dec HKD 68.45 NR N/A 37,653 23.0 20.6 16.6 14.8 Sands China Dec HKD 46.35 NR N/A 47,702 22.9 19.7 17.2 15.4 SJM Holdings Dec HKD 8.79 NR N/A 6,336 22.4 24.3 14.7 12.6 Wynn Macau Dec HKD 29.80 NR N/A 19,728 22.7 19.1 15.4 13.6 MGM China Dec HKD 23.10 NR N/A 11,182 32.0 20.5 17.5 12.9
Singapore Genting Singapore Dec SGD 1.16 BUY 1.49 10,388 18.3 18.3 8.9 8.9
* Macau stocks based on consensus estimates with Genting Singapore based on DBS Bank estimates Source: Bloomberg Finance L.P., DBS Bank
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Income Statement (S$m) FY Dec 2016A 2017A 2018F 2019F 2020F
Revenue 2,228 2,393 2,452 2,566 2,662 Cost of Goods Sold (1,539) (1,318) (1,193) (1,256) (1,279) Gross Profit 689 1,075 1,260 1,310 1,383 Other Opng (Exp)/Inc (207) (207) (313) (319) (325) Operating Profit 482 868 946 991 1,058 Other Non Opg (Exp)/Inc (29.3) (29.7) (27.0) (27.0) (27.0) Associates & JV Inc (6.2) 3.39 0.0 0.0 0.0 Net Interest (Exp)/Inc 39.3 35.4 45.9 52.2 59.0 Exceptional Gain/(Loss) 10.6 (17.4) 0.0 0.0 0.0 Pre-tax Profit 497 860 965 1,016 1,090 Tax (112) (174) (203) (213) (229) Minority Interest (118) (84.6) 0.0 0.0 0.0 Preference Dividend 0.0 0.0 0.0 0.0 0.0 Net Profit 266 601 762 803 861 Net Profit before Except. 256 618 762 803 861 Recovery in FY18-19 earnings EBITDA 779 1,151 1,229 1,273 1,341 due to recovery in VIP rolling Growth chip volumes, lower bad Revenue Gth (%) (7.2) 7.4 2.5 4.6 3.8 debts and successful EBITDA Gth (%) (14.9) 47.8 6.8 3.6 5.3 reduction in operating Opg Profit Gth (%) (15.5) 80.0 9.0 4.7 6.8 expenses Net Profit Gth (Pre-ex) (%) 10.3 141.8 23.3 5.3 7.3 Margins & Ratio Gross Margins (%) 30.9 44.9 51.4 51.1 52.0 Opg Profit Margin (%) 21.6 36.3 38.6 38.6 39.7 Net Profit Margin (%) 12.0 25.1 31.1 31.3 32.3 ROAE (%) 3.7 8.2 10.0 9.9 10.1 ROA (%) 2.3 5.7 7.8 7.9 8.1 ROCE (%) 3.3 6.9 8.2 8.2 8.3 Div Payout Ratio (%) 135.3 70.1 63.2 67.5 62.9 Net Interest Cover (x) NM NM NM NM NM Source: Company, DBS Bank
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Company Guide Genting Singapore
Quarterly / Interim Income Statement (S$m) FY Dec 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018
Revenue 587 596 630 580 675 Cost of Goods Sold (326) (321) (326) (345) (332) Gross Profit 261 275 304 235 343 Other Oper. (Exp)/Inc (47.9) (53.8) (53.3) (54.0) (54.1) Operating Profit 213 221 251 181 289 Other Non Opg (Exp)/Inc (6.0) (2.1) (6.7) (14.9) (1.2) Associates & JV Inc 0.93 1.08 0.73 0.65 0.70 Net Interest (Exp)/Inc 10.3 12.3 10.2 5.14 6.69 Exceptional Gain/(Loss) 35.1 (14.3) (37.3) (0.9) (22.0) Pre-tax Profit 253 218 218 171 274 Tax (43.1) (45.2) (49.3) (36.8) (56.3) Minority Interest (29.1) (29.4) (24.9) (1.2) 0.0 Net Profit 181 143 144 133 217 Net profit bef Except. 146 158 181 134 239 EBITDA 283 293 320 255 359
Growth Revenue Gth (%) 5.2 1.6 5.7 (7.9) 16.4 EBITDA Gth (%) 21.2 3.4 9.3 (20.3) 40.7 Opg Profit Gth (%) 32.5 3.8 13.6 (28.0) 60.0 Net Profit Gth (Pre-ex) (%) 57.6 8.0 14.8 (26.1) 78.9 Margins Gross Margins (%) 44.5 46.1 48.3 40.5 50.9 Opg Profit Margins (%) 36.3 37.1 39.9 31.2 42.8 Net Profit Margins (%) 30.9 24.0 22.8 22.9 32.2
Balance Sheet (S$m) FY Dec 2016A 2017A 2018F 2019F 2020F
Net Fixed Assets 5,242 5,069 5,010 4,950 4,891 Invts in Associates & JVs 50.9 54.3 54.3 54.3 54.3 Other LT Assets 313 345 322 298 274 Cash & ST Invts 4,963 3,834 4,292 4,803 5,365 Inventory 61.5 48.6 53.2 56.2 57.4 Debtors 198 127 134 141 146 Other Current Assets 618 129 129 129 129 Total Assets 11,446 9,607 9,994 10,432 10,918
ST Debt 186 203 203 203 203 Creditor 350 463 413 432 439 Other Current Liab 97.4 200 200 200 200 LT Debt 978 1,013 1,013 1,013 1,013 Other LT Liabilities 305 286 286 286 286 Shareholder’s Equity 9,530 7,442 7,879 8,298 8,776 Minority Interests 0.00 0.00 0.00 0.00 0.00 Total Cap. & Liab. 11,446 9,607 9,994 10,432 10,918
Non-Cash Wkg. Capital 431 (358) (296) (306) (307) Net Cash/(Debt) 3,799 2,618 3,076 3,587 4,149 Debtors Turn (avg days) 69.1 24.8 19.4 19.6 19.6 Creditors Turn (avg days) 112.0 143.3 175.6 158.3 159.6 Inventory Turn (avg days) 17.4 19.4 20.4 20.5 20.8 Asset Turnover (x) 0.2 0.2 0.3 0.3 0.2 Current Ratio (x) 9.2 4.8 5.6 6.1 6.8 Quick Ratio (x) 8.2 4.6 5.4 5.9 6.5 Net Debt/Equity (X) CASH CASH CASH CASH CASH Net Debt/Equity ex MI (X) CASH CASH CASH CASH CASH Capex to Debt (%) 6.0 6.3 16.4 16.4 16.4 Z-Score (X) 5.3 5.0 5.2 5.2 5.3
Source: Company, DBS Bank
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Company Guide Genting Singapore
Cash Flow Statement (S$m) FY Dec 2016A 2017A 2018F 2019F 2020F
Pre-Tax Profit 497 860 965 1,016 1,090 Dep. & Amort. 297 283 283 283 283 Tax Paid (64.4) (78.2) (203) (213) (229) Assoc. & JV Inc/(loss) 6.23 (3.4) 0.0 0.0 0.0 Chg in Wkg.Cap. 382 197 (62.2) 9.74 1.39 Other Operating CF 545 858 1,122 1,174 1,248 Net Operating CF 1,165 1,256 1,140 1,253 1,304 Capital Exp.(net) (69.6) (76.1) (200) (200) (200) Other Invts.(net) 0.0 0.0 0.0 0.0 0.0 Redemption of Invts in Assoc. & JV (177) 0.0 0.0 0.0 0.0 perpetual securities Div from Assoc & JV 0.0 0.0 0.0 0.0 0.0 Other Investing CF (23.8) 533 0.0 0.0 0.0 Net Investing CF (270) 457 (200) (200) (200) Div Paid (360) (361) (482) (542) (542) Chg in Gross Debt (475) (195) 0.0 0.0 0.0 Capital Issues 0.0 0.0 0.0 0.0 0.0 Other Financing CF (145) (2,219) 0.0 0.0 0.0 Net Financing CF (980) (2,775) (482) (542) (542) Currency Adjustments 46.8 (67.5) 0.0 0.0 0.0 Chg in Cash (38.6) (1,130) 458 511 562 Opg CFPS (S cts) 6.51 8.79 9.98 10.3 10.8 Free CFPS (S cts) 9.10 9.79 7.80 8.74 9.16 Source: Company, DBS Bank
Target Price & Ratings History
S$ 1.42 12-mth Date of Closing S.No. T arget Rating Report Price 1.37 Price 1.32 1: 15 May 17 1.15 1.35 BUY 2: 23 May 17 1.15 1.35 BUY 1.27 3: 02 Jun 17 1.18 1.35 BUY 5 6 1.22 4 4: 03 Aug 17 1.20 1.45 BUY 5: 07 Nov 17 1.27 1.51 BUY 2 1.17 6: 26 Feb 18 1.21 1.49 BUY 3 1.12 1 1.07
1.02
0.97 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18
Note : Share price and Target price are adjusted for corporate actions.
Source: DBS Bank Analyst: Mervin SONG, CFA
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Company Guide Genting Singapore
DBS Bank recommendations are based an Absolute Total Return* Rating system, defined as follows: STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame) BUY (>15% total return over the next 12 months for small caps, >10% for large caps) HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps) FULLY VALUED (negative total return i.e. > -10% over the next 12 months) SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame) Share price appreciation + dividends
Completed Date: 11 May 2018 08:14:37 (SGT) Dissemination Date: 11 May 2018 08:25:27 (SGT)
Sources for all charts and tables are DBS Bank unless otherwise specified.
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The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to DBS Bank Ltd, its respective connected and associated corporations, affiliates and their respective directors, officers, employees and agents (collectively, the “DBS Group”) have not conducted due diligence on any of the companies, verified any information or sources or taken into account any other factors which we may consider to be relevant or appropriate in preparing the research. Accordingly, we do not make any representation or warranty as to the accuracy, completeness or correctness of the research set out in this report. Opinions expressed are subject to change without notice. This research is prepared for general circulation. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate independent legal or financial advice. The DBS Group accepts no liability whatsoever for any direct, indirect and/or consequential loss (including any claims for loss of profit) arising from any use of and/or reliance upon this document and/or further communication given in relation to this document. This document is not to be construed as an offer or a solicitation of an offer to buy or sell any securities. The DBS Group, along with its affiliates and/or persons associated with any of them may from time to time have interests in the securities mentioned in this document. The DBS Group, may have positions in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking services for these companies.
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Company Guide Genting Singapore
DBSVUSA, a US-registered broker-dealer, does not have its own investment banking or research department, has not participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months and does not engage in market-making.
ANALYST CERTIFICATION The research analyst(s) primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views. The analyst(s) also certifies that no part of his/her compensation was, is, or will be, directly or indirectly, related to specific recommendations or views expressed in the report. The research analyst (s) primarily responsible for the content of this research report, in part or in whole, certifies that he or his associate1 does not serve as an officer of the issuer or the new listing applicant (which includes in the case of a real estate investment trust, an officer of the management company of the real estate investment trust; and in the case of any other entity, an officer or its equivalent counterparty of the entity who is responsible for the management of the issuer or the new listing applicant) and the research analyst(s) primarily responsible for the content of this research report or his associate does not have financial interests2 in relation to an issuer or a new listing applicant that the analyst reviews. DBS Group has procedures in place to eliminate, avoid and manage any potential conflicts of interests that may arise in connection with the production of research reports. The research analyst(s) responsible for this report operates as part of a separate and independent team to the investment banking function of the DBS Group and procedures are in place to ensure that confidential information held by either the research or investment banking function is handled appropriately. There is no direct link of DBS Group's compensation to any specific investment banking function of the DBS Group.
COMPANY-SPECIFIC / REGULATORY DISCLOSURES 1. DBS Bank Ltd, DBS HK, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), DBSV HK or their subsidiaries and/or other affiliates have a proprietary position in Genting Singapore recommended in this report as of 30 Apr 2018. 2. Neither DBS Bank Ltd, DBS HK nor DBSV HK market makes in equity securities of the issuer(s) or company(ies) mentioned in this Research Report.
Compensation for investment banking services: 3. DBSVUSA does not have its own investment banking or research department, nor has it participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively.
Disclosure of previous investment recommendation produced: 4. DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), their subsidiaries and/or other affiliates may have published other investment recommendations in respect of the same securities / instruments recommended in this research report during the preceding 12 months. Please contact the primary analyst listed in the first page of this report to view previous investment recommendations published by DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), their subsidiaries and/or other affiliates in the preceding 12 months.
1 An associate is defined as (i) the spouse, or any minor child (natural or adopted) or minor step-child, of the analyst; (ii) the trustee of a trust of which the analyst, his spouse, minor child (natural or adopted) or minor step-child, is a beneficiary or discretionary object; or (iii) another person accustomed or obliged to act in accordance with the directions or instructions of the analyst. 2 Financial interest is defined as interests that are commonly known financial interest, such as investment in the securities in respect of an issuer or a new listing applicant, or financial accommodation arrangement between the issuer or the new listing applicant and the firm or analysis. This term does not include commercial lending conducted at arm's length, or investments in any collective investment scheme other than an issuer or new listing applicant notwithstanding the fact that the scheme has investments in securities in respect of an issuer or a new listing applicant.
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Company Guide Genting Singapore
RESTRICTIONS ON DISTRIBUTION General This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.
Australia This report is being distributed in Australia by DBS Bank Ltd. (“DBS”) or DBS Vickers Securities (Singapore) Pte Ltd (“DBSVS”). DBS holds Australian Financial Services Licence no. 475946.
DBSVS is exempted from the requirement to hold an Australian Financial Services Licence under the Corporation Act 2001 (“CA”) in respect of financial services provided to the recipients. DBSVS is regulated by the Monetary Authority of Singapore under the laws of Singapore, which differ from Australian laws.
Distribution of this report is intended only for “wholesale investors” within the meaning of the CA.
Hong Kong This report has been prepared by a person(s) who is not licensed by the Hong Kong Securities and Futures Commission to carry on the regulated activity of advising on securities in Hong Kong pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). This report is being distributed in Hong Kong and is attributable to DBS Vickers Hong Kong Limited, a licensed corporation licensed by the Hong Kong Securities and Futures Commission to carry on the regulated activity of advising on securities pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).
For any query regarding the materials herein, please contact Paul Yong (CE. No. ASE988) at [email protected].
Indonesia This report is being distributed in Indonesia by PT DBS Vickers Sekuritas Indonesia.
Malaysia This report is distributed in Malaysia by AllianceDBS Research Sdn Bhd ("ADBSR"). Recipients of this report, received from ADBSR are to contact the undersigned at 603-2604 3333 in respect of any matters arising from or in connection with this report. In addition to the General Disclosure/Disclaimer found at the preceding page, recipients of this report are advised that ADBSR (the preparer of this report), its holding company Alliance Investment Bank Berhad, their respective connected and associated corporations, affiliates, their directors, officers, employees, agents and parties related or associated with any of them may have positions in, and may effect transactions in the securities mentioned herein and may also perform or seek to perform broking, investment banking/corporate advisory and other services for the subject companies. They may also have received compensation and/or seek to obtain compensation for broking, investment banking/corporate advisory and other services from the subject companies.
Wong Ming Tek, Executive Director, ADBSR
Singapore This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 196800306E) or DBSVS (Company Regn No. 198600294G), both of which are Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. DBS Bank Ltd and/or DBSVS, may distribute reports produced by its respective foreign entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, DBS Bank Ltd accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact DBS Bank Ltd at 6327 2288 for matters arising from, or in connection with the report.
Thailand This report is being distributed in Thailand by DBS Vickers Securities (Thailand) Co Ltd.
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Company Guide Genting Singapore
United This report is produced by DBS Bank Ltd which is regulated by the Monetary Authority of Singapore. Kingdom This report is disseminated in the United Kingdom by DBS Vickers Securities (UK) Ltd, ("DBSVUK"). DBSVUK is authorised and regulated by the Financial Conduct Authority in the United Kingdom.
In respect of the United Kingdom, this report is solely intended for the clients of DBSVUK, its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBSVUK. This communication is directed at persons having professional experience in matters relating to investments. Any investment activity following from this communication will only be engaged in with such persons. Persons who do not have professional experience in matters relating to investments should not rely on this communication.
Dubai This research report is being distributed by DBS Bank Ltd., (DIFC Branch) having its office at PO Box 506538, 3rd Floor, International Building 3, East Wing, Gate Precinct, Dubai International Financial Centre (DIFC), Dubai, United Arab Emirates. DBS Bank Financial Ltd., (DIFC Branch) is regulated by The Dubai Financial Services Authority. This research report is intended only for Centre professional clients (as defined in the DFSA rulebook) and no other person may act upon it.
United Arab This report is provided by DBS Bank Ltd (Company Regn. No. 196800306E) which is an Exempt Financial Adviser as defined Emirates in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. This report is for information purposes only and should not be relied upon or acted on by the recipient or considered as a solicitation or inducement to buy or sell any financial product. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situation, or needs of individual clients. You should contact your relationship manager or investment adviser if you need advice on the merits of buying, selling or holding a particular investment. You should note that the information in this report may be out of date and it is not represented or warranted to be accurate, timely or complete. This report or any portion thereof may not be reprinted, sold or redistributed without our written consent.
United States This report was prepared by DBS Bank Ltd. DBSVUSA did not participate in its preparation. The research analyst(s) named on this report are not registered as research analysts with FINRA and are not associated persons of DBSVUSA. The research analyst(s) are not subject to FINRA Rule 2241 restrictions on analyst compensation, communications with a subject company, public appearances and trading securities held by a research analyst. This report is being distributed in the United States by DBSVUSA, which accepts responsibility for its contents. This report may only be distributed to Major U.S. Institutional Investors (as defined in SEC Rule 15a-6) and to such other institutional investors and qualified persons as DBSVUSA may authorize. Any U.S. person receiving this report who wishes to effect transactions in any securities referred to herein should contact DBSVUSA directly and not its affiliate.
Other In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified, jurisdictions professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.
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Company Guide Genting Singapore
DBS Regional Research Offices
HONG KONG MALAYSIA SINGAPORE DBS Vickers (Hong Kong) Ltd AllianceDBS Research Sdn Bhd DBS Bank Ltd Contact: Paul Yong Contact: Wong Ming Tek (128540 U) Contact: Janice Chua 18th Floor Man Yee Building 19th Floor, Menara Multi-Purpose, 12 Marina Boulevard, 68 Des Voeux Road Central Capital Square, Marina Bay Financial Centre Tower 3 Central, Hong Kong 8 Jalan Munshi Abdullah 50100 Singapore 018982 Tel: 65 6878 8888 Kuala Lumpur, Malaysia. Tel: 65 6878 8888 Fax: 65 65353 418 Tel.: 603 2604 3333 Fax: 65 65353 418 e-mail: [email protected] Fax: 603 2604 3921 e-mail: [email protected] Participant of the Stock Exchange of Hong Kong e-mail: [email protected] Company Regn. No. 196800306E
INDONESIA THAILAND PT DBS Vickers Sekuritas (Indonesia) DBS Vickers Securities (Thailand) Co Ltd Contact: Maynard Priajaya Arif Contact: Chanpen Sirithanarattanakul DBS Bank Tower 989 Siam Piwat Tower Building, Ciputra World 1, 32/F 9th, 14th-15th Floor Jl. Prof. Dr. Satrio Kav. 3-5 Rama 1 Road, Pathumwan, Jakarta 12940, Indonesia Bangkok Thailand 10330 Tel: 62 21 3003 4900 Tel. 66 2 857 7831 Fax: 6221 3003 4943 Fax: 66 2 658 1269 e-mail: [email protected] e-mail: [email protected] Company Regn. No 0105539127012 Securities and Exchange Commission, Thailand
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